How much money did Microsoft burn trying to get the XBOX off the ground? Sometimes it pays to make a little investment in the future. If HP had sold these even at $150/$200 or maybe $200/$250, sure they would have lost money on each unit, but how long until it overtook iPad? Tablets are going to be selling for $100 in 5 years anyway, and HP could have sold a LOT of them at a loss to make it into the market. Once the established leader had been displaced, they could have made tons of money on licensing, app store purchases, etc. Maybe even eventually on hardware. I think they were looking for a home-run, and when they didn't get it, they just gave up all hope. Bad move on HP's part.

At an 80%+ discount and $100, its in the impulse buy range for a lot of people, no matter if it ends up being a useful device or not. Hell, I've got a drawer full of discounted crap in that price range.

I wouldn't assume a tablet at $250 or $300 would sell even remotely like $100... and if it was always $100, it also wouldn't have sold like that.